Know Your Numbers (Episode 2) – Lead Indicators
You’re here to:
- Learn something
- Understand whether there’s something you should be doing in your business that you’re not
- Learn whether you should be doing something better
In this case, you could be using your numbers better to manage your business better and make more money.
I’m hoping to persuade you that’s exactly what we should be doing, that you should be using your numbers better. You should be tracking your numbers and using them to make decisions in your business about what to change.
I’m going to make a small video here.
It’s quite a big topic so you’re going to get a portion that I hope will encourage you to go and investigate further.
Then, you can download your ‘Know Your Numbers’ workbook and then, the ‘Big Numbers Tracker’ and start tracking your own numbers. There’ll be a button at the end of this blog.
Big Numbers, Revenue, Gross Profit and Net profit
In Episode 1, I talked about the Big Numbers, Revenue, Gross profit and Net profit and how important it is to keep an eye on them.
They’re called lag indicators — they lag behind what happened and track your revenue from last month.
Today I want to talk about ‘lead indicators.’
I’m talking about two things:
- Your marketing activity; and
- Your quote tracker
They are both simple.
Your Marketing Activity
Marketing activity is your marketing activity. We track either how much you spend or how many calls to potential customers get made, either by you or by someone who works for you. That can be both if you do both.
Marketing activity is really important. If you do plenty, you’ll be busy. And if you don’t, you probably won’t. You’re certainly leaving it to chance if you don’t do any marketing.
Word of mouth is out of your control. It comes or it doesn’t but it’s entirely up to the world.
So, marketing activity is pretty simple. We track whether you’re doing it and we certainly notice when you stop, assuming you’re filling in the tracker consistently.
What happens commonly for people is that they do some marketing and then they get a bit busy and ease off.
But then the busy period comes to an end and you’re all quiet.
People say things to me like, ‘It’s quiet at the moment, Jon’. And I look at them and go, ‘Have you been doing any marketing?’ And they say, ‘Not really’ and we have a little moment.
You didn’t do any marketing, that’s why you’re quiet.
It’s a fact– don’t do marketing, you will be quiet.
I guarantee it.
Your Quote Tracker
The tracker is about keeping you focused. It’s about making sure you don’t let yourself off the hook for your responsibility to do your marketing.
I’m going to move onto the ‘quote tracker’.
Another simple tool. You write your quotes into the tracker and we keep an eye on them. We do a couple of things:
- We make sure you follow everybody up when you’re supposed to. When you submitted a proposal, whether it’s a tender or a proposal to a customer — a residential customer or a builder or an architect, we keep track of it. We make sure you follow people up and ask them if they need any more help to move the deal along. We track it and keep you accountable for your follow-up work which is necessary.
- The other thing we do is we keep an eye on the total quoted value. If it’s a big number, we’re feeling confident in your future and we might think about whether we need to be hiring people or investing. If it’s a small number and you haven’t got much in your pipeline, we go, ‘better do some work’ and get back to your marketing and start trying to find some work.
So it’s an early warning system for whether you’re going to be quiet just like the marketing activity.
It’s a Lead indicator. It tells us what’s going to happen later.
You put a lot of effort into your quotes and then your proposals.
Don’t just email them to somebody and forget about it and try to find another one.
Be disciplined and professional, follow them up and use the tracker like this to help you do so.
It’s an interesting thing. When you focus on sales, deals, quotes, and opportunities, when you follow people up and you focus and put your attention onto putting more opportunities into that tracker and keeping an eye on them, guess what happens? You make more money. You win more jobs and your business grows.
A story from a builder
I did some work with a builder in Perth and his business grew from $2M to $3.5M in the last 12 months because he had consistent focused energy on to his quotes. We looked at it every fortnight.
I held him accountable for each one that needed following up and made him call people. It reminded him that he needed to call people, follow things up, chase things down and put new ones in there.
He’s now at the point where he’s thinking about investing in growing his team because he’s already got $4M in his quote tracker and it’s only August. We’re in month 2 of the financial year, so it does work. I promise you it does work.
And if you don’t believe me, download the tracker.
It’s free – just share it with three of your friends and start tracking.
Practice on yourself, there’s no risk. There’s no cost except a little work that I’m sure you know is what you should be doing.
So go ahead, download the workbook, watch the video, download the tracker and get to tracking.
Why don’t you go and check your numbers?
- Press the button to download the ‘Know Your Numbers’ workbook which explains everything in more detail
- Watch the explanation video
- Download the tracker by sharing it with 3 people
There are four ways you can engage with me:
1. Subscribe to these emails and get them once a week in your inbox so you never miss a video from me.
2. Join the Trades Business Toolshed Facebook Group where you can watch these videos, ask me questions or talk to your peers.
3. Attend my next Tools Down workshop.
4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.